How can we make International Arbitration truly successful in India?

Recently, I had the opportunity to interact with a very seasoned and experienced Senior Counsel from Singapore. Our conversation moved towards a subject that has been discussed extensively in India over the last few years: can India become a global hub for international arbitration?

His answer surprised me.

He said, quite simply, that India can never become an international arbitration hub.

At first, I thought this was criticism. It wasn't. His reasoning was far more interesting.

According to him, India is too large an economy, too significant a market and too important a participant in global commerce to merely aspire to become an "arbitration hub" in the conventional sense of the term. Countries such as Singapore, London, Paris or Hong Kong have developed themselves as preferred seats for international arbitration for a variety of historical, commercial, institutional and legal reasons.

India, however, has an opportunity to build something much larger. India does not necessarily need to become an international arbitration hub. India has the potential to become one of the countries that could shape the future of international arbitration. That, in my view, is a far more ambitious and meaningful objective.

India's position in the global economy is changing rapidly. India is attracting international capital, global businesses are expanding their operations here, Indian companies are investing overseas, supply chains are becoming increasingly integrated and cross-border commercial relationships are becoming more complex. With greater commerce comes an inevitable consequence: more disputes.

The question, therefore, is not whether India will have international commercial disputes. We will. 

The real question is where businesses will choose to resolve those disputes, and whether they will have confidence in choosing India.

An international investor does not merely evaluate the tax regime, infrastructure, market size or availability of skilled manpower before entering a country. Increasingly, sophisticated investors also look at something less visible but equally important. What happens when the relationship breaks down? Can I enforce my contract? Can I obtain urgent interim relief? Will the dispute be decided by an independent and competent tribunal? Will the proceedings be predictable? Will the award be delivered within a reasonable period? Will the courts respect the autonomy of the arbitral process? And, ultimately, will I receive a fair hearing?

This is where arbitration becomes much more than a dispute resolution mechanism. It becomes part of the country's investment infrastructure.

It would be unfair to suggest that India has not made substantial progress. The Arbitration and Conciliation Act, 1996 was a significant step towards creating a modern arbitration framework covering domestic arbitration, international commercial arbitration and enforcement of foreign awards. The Act has since undergone important reforms, particularly through amendments in 2015, 2019 and 2021, with an emphasis on reducing judicial intervention, improving efficiency and encouraging institutional arbitration.

The Supreme Court has also played a significant role over the years in developing Indian arbitration jurisprudence, repeatedly emphasising principles such as party autonomy, minimal judicial intervention and the need to respect the arbitral process.

India also has credible institutions attempting to build international standard arbitration infrastructure. The Mumbai Centre For International Arbitration, for instance, has developed institutional rules incorporating several features familiar to sophisticated international arbitration users, including emergency arbitrators, expedited procedures, joinder and consolidation. Its 2025 Rules have further introduced mechanisms such as early dismissal, summary procedure, concurrent proceedings, third party funding and tribunal secretaries.

So, the question is no longer whether India has the legal framework or the intellectual capability to conduct sophisticated arbitration. The question is whether the ecosystem surrounding that framework is sufficiently mature, independent and predictable to make India a jurisdiction of choice. And this is where I believe we still have considerable work to do.

One observation from my conversation stayed with me. The Senior Counsel described India as having a deeply litigious commercial culture. There is, perhaps, some truth to this. In India, disputes can sometimes become extensions of commercial relationships rather than mechanisms for resolving them.

A dispute that could potentially be resolved commercially becomes a legal battle. A legal battle becomes an arbitration. The arbitration becomes an extended procedural contest. And eventually the award itself becomes the beginning of another round of litigation.

Not every dispute can or should be settled. Arbitration exists precisely because parties sometimes need a binding adjudicatory outcome. But there is a fundamental difference between using arbitration to resolve a dispute and using arbitration as another battlefield in a larger litigation strategy. If arbitration is to succeed, we need to move towards the former. The objective of arbitration should not be to replicate civil litigation outside the courts. It is to provide a commercially sensible, procedurally fair, independent and final mechanism for resolving disputes.

One of the greatest strengths of arbitration is also one of its greatest vulnerabilities. Arbitration requires the support of courts. But it cannot afford excessive dependence on them. The Arbitration and Conciliation Act itself recognises this principle. Section 5 provides that in matters governed by Part I of the Act, judicial authorities should intervene only where so provided by the statute. The balance is delicate.

Courts must intervene where the law requires them to. They must protect due process, ensure independence and impartiality, prevent abuse and facilitate enforcement. But the court should not become a second arbitral tribunal.

Every time an arbitral procedural decision is routinely brought before a court, every time an award is subjected to an expansive merits review, or every time arbitration becomes the first step towards another round of litigation, the fundamental proposition of arbitration is weakened.

The commercial world values finality and predictability. If parties perceive that an arbitral award can be followed by years of court proceedings, the economic rationale for choosing arbitration begins to diminish. The solution, therefore, is not the absence of judicial intervention. It is disciplined judicial intervention within clearly defined statutory boundaries.

Another issue deserves an honest conversation. India has traditionally seen a significant role for former judges and senior lawyers in arbitration. Their experience is undoubtedly valuable. Judicial experience brings enormous strength to an arbitral tribunal, including an understanding of evidence, procedure, legal reasoning and adjudication. But arbitration is not simply litigation conducted in a different room.

An arbitrator needs a different mindset. A successful arbitrator must understand not only law, but also case management, commercial realities, international procedure, evidence, technology, sector specific issues, conflicts of interest, procedural economy and the expectations of international parties. An arbitrator sitting in a construction dispute should ideally understand construction claims. One hearing an energy dispute should understand the commercial and technical framework of that sector. One dealing with a complex M&A dispute should understand the underlying transaction. And an international arbitration involving parties from different jurisdictions requires sensitivity to different legal cultures and procedural expectations.

This does not mean that retired judges should not be arbitrators. Quite the contrary. Many former judges have made, and continue to make, exceptional contributions to arbitration.

The point is different. Judicial experience should be one route to becoming an arbitrator, not the definition of what an arbitrator should be. India needs a broader, more diverse and professionally trained pool of arbitrators. Training cannot remain optional in spirit. We have spent considerable time discussing who can become an arbitrator. We should spend equally serious time discussing how arbitrators are trained and evaluated, because arbitration is a specialised profession where knowing the law is essential but not sufficient.

An arbitrator should understand international arbitration practice, procedural orders, document production, witness evidence, expert evidence, hearings, tribunal deliberations, conflicts, disclosures, time and cost management and the drafting of awards. India needs to institutionalise such training and professional development at scale, and we need arbitrators who are young, sector specialists, experienced counsel transitioning into arbitral roles, academics and professionals from different disciplines. We need international arbitrators sitting in India and Indian arbitrators sitting in international cases across the world. Most of all, we need diversity of age, professional background, gender, nationality, legal experience and industry expertise. A global arbitration ecosystem cannot be built around a narrow circle of familiar names.

India needs a stronger institutional arbitration culture. It has historically relied heavily on ad hoc arbitration, and there is nothing inherently wrong with that. But institutional arbitration offers an important advantage: an independent professional institution manages the process. A strong institution can assist with appointments, procedural administration, timelines, fees, emergency relief and case management. It also creates accountability and consistency.

India already has institutions capable of playing this role. The MCIA, for example, describes itself as an independent, not for profit arbitral institution built around international arbitration practices. The Government has also recognised institutionalisation as an important part of arbitration reform, including through the proposed framework around the Arbitration Council of India. But institutions cannot succeed merely because legislation encourages them. They need confidence, independence, professional secretariats, financial sustainability, high-quality arbitrator panels and, most importantly, the confidence of Indian and international businesses.

I believe the answer would include at least eight things: independence, predictability, limited and disciplined judicial intervention, speed, quality of arbitrators, strong institutions, enforcement confidence and fairness. Above everything else, an international party must believe that choosing India will not prejudice its interests. That is perhaps the most important point of all. India has an opportunity to lead, not merely participate.

My conversation with the Senior Counsel from Singapore left me thinking about the ambition we should set for India. India should aspire to become a jurisdiction where businesses know that disputes can be resolved fairly, independently, efficiently and finally.

If we achieve that, international arbitration will naturally follow. Foreign businesses will be comfortable choosing India. Indian companies will be comfortable choosing Indian seats. International institutions will increasingly conduct proceedings here. Indian arbitrators will increasingly sit on international tribunals, and Indian jurisprudence will increasingly contribute to the development of international arbitration law. That would be far more meaningful than simply calling ourselves an "International Arbitration Hub." The world should choose India for arbitration on its own.

About the author: Waseem Pangarkar is a Senior Partner at MZM Legal.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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